Third-Quarter Increase in GDP Growth Came From the Biggest Increase in Government Spending in Over Two Years

Third-Quarter Increase in GDP Growth Came From the Biggest Increase in Government Spending in Over Two Years

According to the Bureau of Economic Analysis, the economy grew by a modest 2 percent in the third quarter of 2012. While this was stronger growth than the preceding quarter, allof the increase in GDP growth came from the biggest increase in federal government spending in over two years. Federal government spending rose 9.6% at an annual rate in the third quarter. It is worth noting that government spending fell by 0.1 percent in the second quarter. However, in the third quarter, it grew by 0.7 percent. Growth in the private sector fell by 0.1 percent to 1.3 percent in the third quarter—down from 1.4 percent in the second quarter.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University and a nationally syndicated columnist. Her primary research interests include the U.S. economy, the federal budget, homeland security, taxation, tax competition, and financial privacy. Her popular weekly charts, published by the Mercatus Center, address economic issues ranging from lessons on creating sustainable economic growth to the implications of government tax and fiscal policies. She has testified numerous times in front of Congress on the effects of fiscal stimulus, debt and deficits, and regulation on the economy.

Keith Hall was a senior research fellow at the Mercatus Center at George Mason University from April 2012 to September 2014. From 2008 to 2012 he served as the 13th Commissioner of the Bureau of Labor Statistics (BLS).